Marico buys herbal soap Manjal from Kerala co

TNNJan 4, 2006, 12.46am IST

MUMBAI: Haircare major Marico has acquired herbal bath soap brand 'Manjal' from Kerala-based Oriental Extractions for an undisclosed consideration. With this acquisition, Marico has strengthened its retail network in Kerala and will now make a direct entry into the soap market in India. Earlier, the company's move to acquire Chandrika, another South-based brand came a cropper when Wipro beat the company to the deal. Internationally, the company is present in the soap market in Bangladesh. Marico's closing share price was up by 1.25% to Rs 388.25 on Tuesday from the previous day's closing of Rs 387.

Manjal has an annual turnover of about Rs 9 crore, largely in Kerala, with a growing market share. Manjal's brand equity owes largely to its turmeric-based formulation. The soap was so far marketed under the banner of SD Pharmacy, a sister concern of Oriental, with over 65 years of expertise in ayurvedic proprietary medicines and OTC products in Kerala. "Our primary objective in acquiring Manjal has been to strengthen our presence in Kerala, through extending the Marico range of products to yet another category. We expect that Manjal's retail reach of around 50,000 outlets will complement Parachute's reach of a similar number in Kerala and help Marico fortify its network," said a senior official from Marico.

A regional brand, Manjal's sales almost entirely comes from Kerala. Marico will initially focus on the Kerala market before going national. "This is in line with the prototype approach that Marico marketing follows —take a region, test a concept and then after careful deliberations, expand. Manjal addresses a consumer segment similar to that serviced by Marico's other brands especially Parachute," he said.

Marico's consolidated turnover crossed Rs 1,000 crore in FY05 while its net profits rose to Rs 70 crore. Currently, Marico has 12 brands across the personal care and wellness categories, and a presence in around 25 countries. Marico is worth Rs 1,700 crore in market capitalisation. Parachute and Saffola are its two most well-known brands in India. The Parachute coconut oil franchise reported a growth of 6% during FY05 and a market share above 50%. Marico's net sales grew by 12% in FY05 to touch Rs 948 crore.